Startups … often suck

Pete Cashmore has been coming up with very clever titles (and as always great insights on social networking) over at Mashable. A good example is today’s “Web Startups and the Lying Liars That Lie About Them” where he basically makes the case that in general startups suck worse than one would think if one simply took what is written about them in blogs (including his) for granted.

This point hits home hard when you note, as Don Dodge recently did, that it appears startups absorb more money from venture capitalists than they return to the VCs that keep new web companies spinning out of the web, and often (more in the old days than now) keep them spinning out of control even after the startup’s business model has failed.

Interestingly, my own experience with our travel startup Online Highways was something of the opposite of the normal deal. We grew fast, did not get VC money, and started to make enough that we could open new offices in India and a second in Oregon. Initially by many measures we were not a great travel site but we were doing spectacularly well – by July of 2003 we had over 3 million monthly unique visitors. However, after pouring over a million of revenues into developments, maps, and other improvements we actually got nailed by Google for reasons that remain unclear, but as always make the internet a darn interesting place to hang out whether you are a startup that sucks or one that rocks.

Great article by Marc Andreessen about VC

More on this from NYT May 11th